Commentary: $2.6 trillion could be saved without touching safety net

Rather than focusing their negotiations on specific and achievable savings that would stabilize our debt for a decade or more, the two leaders have instead been talking about areas of the budget in which there’s almost no common ground.

Boeing/Lockheed

When the CEO of Boeing talked to President Obama and Speaker Boehner about deficit reduction, he didn’t ask them to kill the next generation bomber, which Boeing and Lockheed are offering to design and build.

Instead of reaching a reasonable compromise, each party is insisting that the other surrender unconditionally. The Democrats and Republicans alike would rather win a bloody political victory than achieve a negotiated peace.

For Democrats, the only goal of the fiscal-cliff confrontation seems to be raising tax rates and getting more revenue from the wealthy. For Republicans, it’s shredding the safety net for seniors and the working poor.

They’re ignoring the most obvious solution: Eliminating unproductive and unnecessary federal spending and tax expenditures, especially corporate welfare that only benefits special interests. If even we didn’t have a deficit problem, we should eliminate or minimize this kind of wasteful spending.

We know why no one is talking about this solution: The corporate interests who feed at the public trough control the politicians and the media who have worked themselves into a frenzy over the debt and the fiscal cliff. You’ll never see a group of CEOs, like Honeywell’s David Cote or Jim McNerney of Boeing, come to Washington to lobby to have their subsidies eliminated, but you will see them ask for old and sick people to bear the costs of deficit reduction. Read more about the CEOs lobbying in Washington.

Republicans have been berating the president for not offering specific spending cuts, but the Republicans haven’t been specific either.

That’s why Obama ought to offer a specific plan to reduce spending, without lowering benefits from Social Security and Medicare. At some point, we need to put those entitlement programs on a sound footing, but there’s no urgency. Read about how to fix Medicare the right way.

Obama doesn’t have to run for office again, so he’s free to say what everyone already knows: We don’t need to subsidize farmers, or energy companies, or defense contractors, or pharmaceutical companies, or the real estate business, or banks, or hedge funds. Corn and coal and sugar and 30-year mortgages don’t need to be subsidized.

It’s possible to achieve all the budget savings we need for the next 10 years simply by cutting the fat out of discretionary spending programs and tax expenditures, without raising tax rates on the wealthy or cutting the safety net at all.

All we need to do is look at the recommendations of such good-government groups as the Government Accountability Office, Taxpayers for Common Sense, or the Cato Institute.

Here’s my list of $2.6 trillion in savings over the next 10 years. It doesn’t cut education, or research into green energy, or reduce benefits for retirees. It doesn’t just transfer our federal problems onto the states’ treasuries.

Investors: What, me worry about fiscal cliff?

(4:45)

Investors are trading with optimism that Congress will resolve the fiscal cliff crisis but economists surveyed by The Wall Street Journal aren't so sure. Jonathan Cheng reports on Markets Hub. Photo: Reuters.

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